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Sophia's Accounting Final Exam Review Questions with Correct Answers
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Sophia's Accounting Final Exam Review Questions with Correct Answers
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Sophia's Accounting Final ExamReview Questions with Correct
Answers
Jason Ford has been the sole owner of a bicycle sales and repair shop for
several years. Which of the following business types would limit Jason's
personal liability exposure to the entity's debts? - -limited liability company
-Ten years ago a corporation purchased a building for $180,000. At that
time, the corporation felt that the building was worth $205,000. The current
market value of the building is $420,000. The building has been assessed at
$395,000 for property tax purposes. At which amount should the corporation
record the building in its accounting records? - -$180,000 (the amount you
bought it at)
-Equity of a corporation is broken out into two components. Which of the
following are the two components of the equity of a corporation? - -
contributed capital and retained earnings
-Diamond, Inc. had the following transactions during June:
Performed services for $3,000 on account; received cash on account, $6,000;
paid $800 for repair expense; paid $1,800 to a supplier that it owed from the
previous month. What is the combined effect on Cash of these June
transactions? - -$3,400 increased (6,000-800-1,800=3400)
-Newton Corporation settles a liability by making a payment in cash. How
does paying this liability affect the accounting equation of the business? - -
assets and liabilities decreased
-Country Homes Corporation just recorded a transaction in its books. If this
transaction increased the total liabilities by $8,000, then? - -assets must
increase, or equity must decrease by $8,000
-Calculate the amount of total assets at the end of the first year. Assume the
plumbing supplies of $300 are left at the end of the year. - -(SHE= common
stock - dividends + revenues - expenses )
$13,000+$15,000-$500+$2,900=
$30,400
-Which is the correct order or preparation of financial statements? - -income
statement, statement of retained earnings, balance sheet, statement of cash
flows
, -Which transaction will affect the balance of Retained Earnings? - -paid rent
expenses for the month
-- -
-Flow of accounting data? - -transactions occur, source documents are
prepared, transaction are analyzed, transactions are journalized and posted
-Credit - Cash 9,500
debit- unearned revenue 9,500 - -received $9,500 for services to be
performed in a later period
-A business purchases equipment by paying $8,390 in cash and issuing a
note payable of $15,445. Which of the following occurs? - -debit - equipment
$23,835
credit- cash $8,390
credit- notes payable $15,445
-Calculate the total amount of debits for trial balance - -(cash, expenses,
furniture, accounts receivable)
$4,000+$1,500+$13,000+$16,000 = $34,500
-Assessed using the debt ratio? - -rick of default
-If a company is using accrual basis accounting, when should it record
revenue? - -when services are performed, even though cash may be
received at a later date
-At the time the transaction occurred, which of the following would result in
an increase in net income under the accrual basis of accounting, but would
not result in an increase in net income under cash basis accounting? - -
performance of service on account
-Hudson Landscaping Service bought equipment for $10,800 on January 1,
2019. It has an estimated useful life of five years and zero residual value.
Hudson uses the straight minus−line method to calculate depreciation and
records depreciation expense in the books at the end of every month. As of
June 30, 2019, the book value of this equipment shown on its balance sheet
will be? - -$10,800/5 years = 2,160
2160 x (1/2)= 1,080
$10,800 - 1,080 = $9,720
-Global Enterprises, Inc. signed a one−year $42,000 note payable at 9%
interest on April 1, 2018. If Global only adjusts its accounts once a year at
year-end, how much interest expense was accrued on December 31, 2018?
, (Round any intermediate calculations to two decimal places, and your final
answer to the nearest whole number.) - -($) =
$2,835
-The adjusted trial balance shows? - -account balances after adjustments
-The accountant for Barnes Auto Repair, Inc. failed to make an adjusting
entry to record $5,000 of unpaid salaries for the last two weeks of the year? -
-the net income will be overstated
-The accountant for Eagle Financial Services, Inc. failed to make an
adjusting entry to record $3,000 of telephone expenses for the last two
months of the year? - -the total liabilities will be understated
-The accountant of Newton Legal Services failed to make an adjusting entry
for supplies that had been used for the year. Assume the supplies were
initially recorded as an asset. Which of the following statements is true? - -
the total assets will be overstated
-Liquidity is a measure oh how ____ - -quickly an asset may be converted
into cash
-An account that is not closed at the end of the period is called a(n)? - -
permanent account
-Revenues and expenses may be transferred to the ________ account before
their final transfer into the Retained Earnings account. - -income summary
-Which are temporary accounts that are closed at the end of the year? - -
revenues, expenses, and dividends
-After the closing entries are posted, what is the balance in Retained
Earnings? - -(retained earning + service revenue - dividends - ALL
EXPENSES)
14,500 + 258,000 - 27,000 - 64,000 - 5,700 - 14,000 - 14,200 - 22,000=
$125,600
-Which of the following accounts will be included in a postminus−closing
trial balance? - -interest payable
-Compute the current ratio - -current assets: cash, accounts receivable,
prepaid rent, prepaid insurance, office supplies
current liabilities: accounts payable, salaries payable, interest payable
(current assets / current liabilities)
12,000+8,000+7,000+2,000+3,100 = 32,100
5,300 +4,100_2,300= 11,700
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